Take-Two Surges On Q2 Earnings Beat And Strong Guidance

Take-Two Interactive Software, Inc. (TTWO) reported earnings results for the second quarter of fiscal’15 today. The video game publisher reported a net loss of $41.1 million that was up 66% year over year (YoY) for the quarter ended September 30, 2015.
Earnings Results
Adjusted loss per share for the video game publisher was $0.44, which beat analysts’ estimates of a loss of $0.60 per share. Sales for the quarter also beat analysts’ expectations of $110 million, standing at $135 million. While revenues declined steeply (89% YoY), sales were at $1.27 billion, bolstered by the release of “Grand Theft Auto V” (the fastest selling video game in history).
Take-Two Interactive chairman and CEO Straus Zelnick attributed the company’s success in the quarter to recurrent consumer spending on downloadable content (DLC). He added that the successful launches of titles such as “NBA 2k15,” “Borderlands: The Pre-Sequel,” “Sid Meier’s Civilization: Beyond Earth,” and “WWE 2k15” will contribute to a strong upcoming quarter.
Both the major divisions of Take-Two Interactive, Rockstar Games and 2k, have performed well in the quarter. Rockstar’s success has primarily come from updates to Grand Theft Auto Online, especially from the extremely popular San Andreas Flight School Update. While 2k’s success is well spread out, with a variety of console and PC games, 2k has also enjoyed unprecedented success in the mobile arena. The WWE SuperCard has become the company’s most successful mobile game yet with over 3.5 million downloads.
Take-Two is not the only video game publisher to post better-than-expected earnings results. Two other juggernauts in the video game industry also beat expectations yesterday: Electronic Arts (EA) and Nintendo. EA reported adjusted earnings per share of $2.05 and revenues of $4.175 billion, beating estimates of $1.92 and $4.16 billion, respectively. Nintendo beat analysts’ estimates of a net loss of $0.16 million, by reporting a net profit of $2 million.
Guidance And Sell-Side Expectations
Mr. Zelnick said: “As a result of our better-than-expected results, strong current business trends and positive outlook, we are raising our revenue and earnings expectations for the full-year. Fiscal 2015 is poised to be one of our strongest years ever and we are well-positioned for continued success.”

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